UPDATE 1-Russia's Putin meets Berlusconi, German businessmen

* Italy's Berlusconi arrives in St. Petersburg

* Berlusconi, Putin discuss joint projects

* German businessmen say want to take part in privatisation (Updates with Berlusconi arrival, adds German businessmen)

By Gleb Bryanski and Paolo Biondi

ST.PETERSBURG/MOSCOW, Russia, Oct 21 (Reuters) - Russian Prime Minister Vladimir Putin discussed joint investment projects with Italy's Silvio Berlusconi and top German businessmen on Wednesday as Russia's economic outlook brightens.

Russia, the world's second biggest oil exporter, hard hit by an economic crisis and falling commodity prices, is wooing foreign investors as it seeks to modernise the economy and reduce dependency on energy exports.

Russia views Germany and Italy as amongst its most friendly nations in the European Union. Germany is also Russia's biggest trading partner with over $60 billion in trade. Both countries are the largest European consumers of Russian gas.

"Tonight and tomorrow we will have a possibility to show you our cooperation. We are talking about cooperation with Finmeccanica (SIFI.MI), about cooperation with Fiat (FIA.MI)," Putin told Berlusconi during a meeting in St. Petersburg, according to comments posted on the government's website.

Italian group Finmeccanica SpA (SIFI.MI) has bought 25 percent of the Russian maker of the Sukhoi Superjet 100. Car maker Fiat (FIA.MI) has agreed to set up a tractor joint venture with truck maker KAMAZ (KMAZ.MM).

READY TO SUPPORT

St.Petersburg Governor Valentina Matviyenko said at the meeting that after preliminary talks Finmeccanica has also agreed to start high-speed light tram production in Russia.

"I am sure you will reach an agreement about this factory. From the side of the Italian government we are ready to support this project as well as Finmeccanica, the biggest industrial group in Italy," Berlusconi told Putin.

Italian oil group ENI (ENI.MI) is involved in the South Stream gas pipe project which is being built under the Black Sea and is seen as the main rival to the Nabucco pipeline, backed by the European Union and the United States.

Putin and Berlusconi will hold a telephone conference with Turkey Prime Minister Tayyip Erdogan on Thursday to discuss South Stream after Turkey gave green light to the pipeline to pass through its territorial waters.

"As far as the South Stream project in the Black Sea as concerned we are working together with ENI and are now solving issues with our Turkish partners. There is an obvious movement forward," Putin told Berlusconi.

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